Expats around the world are increasingly oncerned that the ongoing lockdowns to curtail the spread of covid-19 have the potential to result in unexpected tax bills as a consequence of enforced longer-than-planned stays.
In the UK an expat is normally considered to be tax-resident if they reside more than 183 days in any given tax year.
The UK applies a statutory residence test (SRT) to exceptional circumstances. The UK governments website lists the extenuating circumstances by which an expat could be considered non-resident:
- Self-isolating or other quarantine measures on the advice of a medical professional
- Obeying government advice not to travel from the UK as a result of the virus
- Staying in the UK because international borders are closed
- Your employer directs you to return to the UK temporarily as a result of the virus.
A spokesman for HMRC, Britain's tax office, told i-Expats: "Events resulting from the impact of the virus are changing rapidly and this guidance may change at short notice as situations change. The covid-19 pandemic may impact your ability to move freely to and from the UK or, require you to remain unexpectedly in the UK.
"Whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case."
Many US expats residing in the UK fear falling between the two countries' systems, as II reported last month. "Many risk finding themselves stuck in limbo: Ineligible for support from the British government if they lose their jobs, they also have no homes — or health insurance — to go back to in the US," we reported.
Approximately 174,000 Americans live in the UK, many of whom do not qualify for government support under the terms of their visas.
If an American expat on a work visa loses their job before they've been in the UK for five years, they're normally required to leave the country.